Sprint CEO defends company’s decision to bet it all on Apple’s iPhone

Sprint chief executive Dan Hesse is being watched closely by the company’s board of directors, but the CEO has to answer to investors and subscribers as well. Last year in October, Hesse revealed that the company is placing a massive $15.5 billion bet on Apple’s iPhone, and in a recent interview with the GSMA’s Mobile World Live blog, Hesse defended the move, which has been criticized by a number of industry watchers. Read on for more.

“Subsidises are heavy for the iPhone. This is the reason why a high percentage of new customers is important,” Hesse said during the interview. “But iPhone customers have a lower level of churn and they actually use less data on average than a high-end 4G Android device. So from a cost point of view and a customer lifetime value perspective. They’re more profitable than the average smartphone customer.”

Hesse stated that iPhone sales have “exceeded expectations” thus far, and he claimed Sprint is stealing customers away from AT&T and Verizon Wireless thanks to the iPhone. “Four out of every 10 iPhones we sold [in the fourth quarter] are for new customers. That’s roughly double the rate of either of our competitors, so we’re pulling a lot of customers from our competitors,” he said.

The CEO points to Sprint’s unlimited smartphone data offering as a key differentiator for the carrier as compared to its competitors. “The marriage made in heaven is unlimited plus the iPhone,” he said during the interview. “My plan is to continue for as long as we can, hopefully forever. The customers have spoken very clearly on this: they like simplicity and unlimited. It’s a differentiator in the market.”